Thursday, 25 March 2010: 16:45
For most developing countries the issues of trade liberalization, environment, and income improvement lead to dilemmatic problem. Aside from the benefit of trade liberalization, developing countries face depletion of natural resources and pollutant haven plays in determining of degradation and threatened sustainable development. There is no doubt, that renewable energy instead of fossil fuels may reducing global warming and increasing economic growth. Rutherford-Boehringer (2002) yields of somewhat conclusion that reducing global demand of fossil fuels may impact to fossil fuels exporters. In fact, these impact explain most on developing countries. Otherwise, EU has ambitious plan to reducing carbon emission with doubling share renewable energy from 6% in 1997 to 12% in overall energy consumption. It seems, that renewable energy policy will lead developing countries in along side dilemmas, either benefit or cost for the economy. It gives to rise a research question, when and how the renewable energy policy may gives somewhat of benefit and cost to developing economies specially for poverty alleviation.
To answer this research question, dynamic CGE is an appropriate tool to quantify assessment of renewable energy policy on economic, energy, and environment performance. The CGE model incorporate renewable energy equation block which consist of particular agriculture and forestry, geo thermal, solar, and wind sector. Using the Global Trade Analysis Project (GTAP) and International Energy Agency (IEA) data. The database of Social Accounting Matrix (SAM) comprise of conventional account and additions with renewable energy balance as an expanding block of energy balance account.
The (expected) result shows that the renewable energy policy in European Union may leads secure in energy and reduce global warming but harm to the economy. Otherwise, for developing countries this impact causes losses gain from trade and decreasing in income.